Cancellation of benefits on the mortgage can greatly harm the rental market

More than half of homeowners in the UK who took part in the survey, conducted by estate Agency Rentify, said that, most likely, they will raise rents for its tenants, in connection with changes in tax legislation announced by the government.

According to the planned changes, announced by the Minister of Finance George Osborne, will cut the exemption for mortgage rates from 45% to 20%.

Statistics showed that any unpopular government initiative even under discussion may discourage market participants desire to participate in business. Benefit cuts in mortgage rates the real estate market of the United Kingdom perceives in bayonets and homeowners are not willing to expand their investment portfolios in case of giving official status to such initiatives. The increase in rental rates is also not a solution, as the rental price is dictated by the market and the tenants just can’t pay more because of their financial situation.

Benefits of mortgage loans, referred to, enable homeowners to better manage their property, directing the savings on insurance, housing, repairs, taxes.

Major tenants in the UK are people aged 20 to 39 years. The study shows that more than half of the people of this age in the UK will live in the private rental sector in the next 10 years. The abolition of benefits may lead to reduced supply in the rental market of residential property and will exacerbate the already difficult situation on the housing market of England, where the solution to the problem of affordable housing for many more years to be a headache for any government.

® Helen Entree. G. 25.07.2015

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